Posted
by
samzenpus
on Thursday June 30, 2011 @07:11AM
from the tax-the-tubes dept.

PCM2 writes "Residents of California who participate in the Amazon Associates Program received an email warning them that the program will be terminated as soon as a new California law goes into effect. The law, which CA governor Jerry Brown signed, would require online retailers to collect sales tax on purchases. According to Amazon's statement, 'We oppose this bill because it is unconstitutional and counterproductive. It is supported by big-box retailers, most of which are based outside California, that seek to harm the affiliate advertising programs of their competitors.'"

Do you even read what you're typing? At least try and get the facts correct. Free medical has not been that for a long time, with the exception of the unmarried troop on active duty using a military treatment facility. Troops have to pay for family dental for example and once you leave active duty you have to pay for your medical care too. Prescriptions outside the basics genrally have to be ordered by mail for a copay. Free food and housing are not that. There are allowances for these things, but they are based on a standard of living from 40 years ago as to what size place yu might need and never covers all the bills. Child care has never been free.

More nonsense. Are you letting your political ideology control your reasoning? (You have a hammer and everything you see is a nail.)

"Funny how Amazon "can't figure this out" with all their resources, but the local mom and pop nails it with few problems. "Before I retired I wrote software for the Dept of Revenue, State of Nebraska. Taxes and their collection isn't a funny matter for anyone, and it is not surprising at all that Amazon "can't figure this out". My state is one of the smallest, population-wise. We have less than 2 million people living in 93 counties. But, at the time I retired 3 years ago, there existed in the state over 4,700 different taxing entities. Resident zip codes do not determine which taxing district a citizen resides in, even if they limited their shopping just to one location. Citizens can get their mail in one zip code but live in another. Strange as it may seem to you, many residents do not know which taxing district they live in and would not be able to supply that information to Amazon. Or, strange as it may seem to you, they frequently put the wrong information in forms they fill out, even if they fill in online digital forms that do not have to be scanned and fed to an OCR engine, which is yet another can of worms. So, even for a small state like Nebraska, tracking sales by over 4,700 taxing entities that are NOT distinguished by a zip code or address can be, and often is, a nightmare. But, don't feel bad. You not alone. A LOT of elected representatives have unrealistic expectations of what a computer program "should be" able to do.

Nebraska's constitution requires a balanced budget and the legislature is forbidden to spend more than the tax revenues take in, so there isn't a any negative income or sales tax calculations using convoluted rules to benefit those who are more equal than others, like CA, Tx, NY, MA and other heavily indebted states have. To require Amazon to keep track of the taxing districts and policies of 50 states and the territories of the USA and do their tax collections would put a burden on Amazon that could, and probably would, drive it out of business. Add to that the legal costs that would most definitely arise because some political or selfish-interest groups would see Amazon as a Golden Goose that they could pluck in a political favorable court district, and you have the last nail in Amazon's coffin.

YOU are a responsible citizen, or should be. What's wrong with YOU keeping track of how much YOU buy at Amazon, and when tax time comes around YOU compute what sales tax YOU owe on YOUR purchases through Amazon, and submitting that tax to YOUR state when YOU pay your state income tax? That's how it is done in Nebraska, and that's how I did it six months ago, and I do my taxes on line.

Normally I don't comment people's sigs, but yours is instructive here. The phrase "question authority" doesn't mean "question authority at a town hall meeting", it means, "question the legitimacy of authority to control you and take your stuff". Similarly, you believe that there are a whole host of things that high income countries have because they're provided by the government. But we're talking about a state sales tax, and you're talking about a list of services that Amazon doesn't get from the state of California:

* Roads used by the U.S. Postal Service to deliver things are paid by gas taxes paid by USPS out of the postage it collects.* The programmers' education was primarily to their benefit, not Amazons. They're not slaves. And to the extent those programmers got in state tuition, they or their families were taxpayers in that state.* Federal courts are not administered by the state of California.* Amazon doesn't need California police since they're not in California.* California doesn't protect Amazon from (absurdly hypothetical) foreign invaders.* Since Amazon's warehouses are not in California, so California's firefighters will not be the ones to protect them.

The California government is trying to shake down Amazon. Amazon is right to resist.

I don't live in California or care about this, but I do know people that do, and I can fully understand from a retailer's point of view why it is impossible to collect sales tax correctly for all 50 states.

1) exemptions - some states give an exemption up to $XXX/year tax free - how does Amazon know if/when such an exemption is hit and when to start collecting tax? Collecting tax before the exemption is hit gives the government a free loan using your money and probably isn't legal.2) already taxed - nearly all states have a tax on online purchases already, called Use Tax. California already has this (in fact, they already have mandatory use tax registration to provide tax info to the state for in-state sellers earning over $100000/yr) Start enforcing your existing laws already.3) 50 states, 50 different tax codes, and then subdivide that for special taxes by county (for instance, I pay something like 1.15% extra tax for stadiums in my county). It boils down to a ridiculous amount of data you need to keep on each person and each area. If I had to collect that much info about a person, I'd sell it to marketers to compensate for the amount of work and expense involved, and I'm generally not a dick like that.4) Use tax schedules (and is for out-of-state sales, it would probably apply to sales tax schedules) vary by state - some require collecting monthly, others quarterly, and others yearly (often due on April 15). This is a tremendous amount of bookkeeping, as I mentioned in point 3.

I think you misunderstand what he means by "burden". Just because Amazon doesn't use any services or resources in California does not mean they don't own them anything.

Amazon wants access to the Californian market. In exchange for that they have to abide by Californian law when operating there, both in terms of things like consumer protection laws and in terms of taxation. Even if they don't use any services in California themselves they are a) competing with Californian businesses who do pay taxes for the same customers and b) reducing the tax burden on the consumer who then has more money in his/her pocket to spend.

Sorry, spending by the legislature is not CA's problem. Actually, there are many interrelated problems, many of which are a result of Prop 13.1. Property taxes, which are a generally stable source of income are limited to the point of insignificance. This was sold as a way to protect grandma, but the real beneficiaries are big corps like chevron who are still sitting on the same land they were when it passed. Because property taxes cannot be touched, we have to rely on income and sales taxes, which are inherently unstable and obviously tank when you need them most.2. Ballot box budgeting, has tied the hands of our legislature for quite some time. We keep passing laws specifying where and how much money must be spent, but without any regard to where the money comes from or to whether there is, in fact, any money to spend.3. Prop 13 also raised the bar on tax increases to the point where it is virtually impossible to raise taxes at all. It used to be, if the budget stayed within 5% of the previous year's budget, it could be passed with a majority vote. If the budget grew or shrank too much, a super majority was needed. This seems quite logical and effective to me.4. We pass stupid laws that dramatically increase our prison population without considering the financial impact of housing them.

There are many reasons why CA is in the shape that it is in. Raising taxes and cutting spending are only stop gap measures for what is really needed. The only way CA is going to get out of the shape it's in is to hold a Constitutional Convention. We need to gut and rewrite it in such a way as to be fair, effective and quite a bit more strict as to how it is modified.

Of course Amazon sells it using the DARPA developed internet...very little of which was financed through the use of California sales taxes.

ships it on public roads...for which it pays the shipping companies, who, in turn, use the money Amazon gives them to pay fuel and vehicle taxes.

often using the US Postal Service...which is a private company (with a government granted monopoly) financed by postage.

hire programmers who were educated in public schools and at public universities...who receive higher incomes and, therefore, pay more income taxes. The money to pay the income taxes comes from Amazon.

sue their competitors in Federal Court...for which Amazon pays their own lawyers. The money to support Federal Courts, themselves, I think comes from federal income taxes, which Amazon pays. But perhaps you meant California State Court. You actually have some point with this one. On the other hand, Amazon pays taxes to support Washing State Court, and Amazon's competitors, possibly including competitors in California, can sue Amazon in Washington.

over patents issued by the USPTO...for which Amazon pays federal income taxes.

Their facilities are protected from crime by publicly funded police...for which Amazon pays Washington state and local income taxes, property taxes, sales taxes, and a variety of others.

and from foreign invaders by the US military...for which they pay federal income taxes.

If one of their buildings catches fire, it will be put out by publicly funded fire fighters...for which Amazon pays Washington state and local income taxes, property taxes, sales taxes, and a variety of others.

That's a developed world lifestyle, and it's made possible by the continuous effort of a capable government.Perhaps so, but why should Amazon pay California sales taxes?

After reading a few comments, most of the people here don't understand this law very well. What California did is redefine what being located in California means to:

If you use California contractors for marketing purposes (affiliates), you are located in California. Since you are located in California, you have to collect sale tax for us.

If California were more creative, they should have tried defining a nexus as anyone who uses a shipping service with warehouses and vehicle depots in the state of California. Fedex or UPS could not have pulled out as easily under this condition.

So, Amazon fired the California contractors. Now they aren't located in California any more. Stupid law gets equally mind numbing response. Amazon pulls out, and their affiliates, some of which are very large web publishers, will have to forgo participating in Amazon's affiliate program or will have to move out of California to protect their income from their Amazon affiliate programs.

What California did is try to make an end run on the US Constitution and a recent supreme court decision that said requiring out of state merchants to pay sales tax was an attempt to regulate intrastate commerce, a power that is exclusively delegated to the Federal Governement. The basic reason for this is to prevent trade wars between the states over tariffs, duties and exclusionary laws. Fortunately, California has inadvertently aimed it's cannon at it's own foot and fired a round of grapeshot: By attempting to regulate Amazon, California affiliates now will have to leave the state to continue doing business.

A lot of people seem to think somehow Amazon was ducking an obligation to pay sales tax. This is simply wrong. The buyer pays sales tax. The seller only acts as an agent in collecting it (in most states, the seller actually gets to keep a cut of the sales tax). The only way for Amazon to duck sales tax is to not pay sales tax on their taxable purchases.

Some people think that affiliates are not reporting their taxes. Some less intelligent affiliates my not report their income, but most will because Amazon reports your Affiliate income to the IRS, so if you fail to report your affiliate income, you are likely to get into trouble.

A few people see the mail order sales tax issue as one of being fair to local merchants. As it sits, mail order merchants in California can sell to every other state and protectorate without having to collect sales tax on those sales, just like an Indiana retailer doesn't have to collect sales tax for a sale shipped to California. It's actually pretty fair to everyone except huge companies that do have actual locations in every state.